Late last year the Labour government announced plans to increase university tuition fees from September 2025, by lifting the cap on full-time undergraduate fees in England from £9,250 to £9,585 per year. This won’t solve the crisis of higher education funding, argues ADAM POWELL-DAVIES, and students and campus workers need to prepare for the battles ahead.
The government’s announcement last November brings an end to an eight-year period in which tuition fees have stood still. Beginning under prime minister Theresa May, Conservative governments had steered well clear of increasing fees, seen by most Tory MPs as ‘politically toxic’.
According to one poll conducted before the general election, increasing tuition fees was even less popular among voters than Rishi Sunak’s widely derided pledge to bring back national service. A YouGov poll of 6,300 people, published in September 2024, found that more than half were either in favour of decreasing fees (26%) or scrapping them entirely (26%); and only nine percent thought fees should be increased. It is against this backdrop that former Tory MP Robert Halfon – universities’ minister between 2022 and 2024 – told vice-chancellors last year: “No way am I going to advocate increasing tuition fees”.
Most significantly, Halfon and his fellow Tory ministers were forced to contend with the alternative model for higher education proposed by Jeremy Corbyn as Labour leader. Alongside a number of anti-austerity policies aimed at ‘redistributing wealth from the 1% to the 99%’, Corbyn pledged to make university free – restoring corporation tax to scrap tuition fees and reintroduce maintenance grants for all students. Under pressure from the wave of enthusiasm that Corbyn’s policies inspired among young people in particular, the Tories in 2017 were forced to freeze tuition fees at £9,250; and they have stayed there ever since.
The same pressure was also felt by the Labour right wing. In the leadership contest to replace Corbyn in 2020, Keir Starmer was compelled to adopt his predecessor’s pledge to scrap fees. It was not until 2023, once the counter-revolution against Corbynism within the Labour Party had been consolidated, that Starmer dropped the free education policy, just as he has done with the rest of Corbyn’s 2019 manifesto.
By raising the cap on tuition fees, Labour is trying to firefight the consequences of the Tories’ eight-year freeze – only now as a firmly pro-capitalist, pro-austerity government under Keir Starmer. At the same time, they have promised a wider ‘overhaul’ of higher education funding – which may well entail further fee changes beyond what has already been announced – set to be unveiled at some point in 2025. This signals the potential for further attacks to come on students, staff and higher education.
Roots of the crisis
Under the current higher education funding model, universities receive just a small fraction of their income directly from the government, in the form of teaching grants. Universities are expected to make up the rest of their funding themselves, competing with each other for income as part of a higher education market. By far their largest income source is students’ tuition fees, accounting for more than 50% of the sector’s total funding since 2019-20. In comparison, fees made up just 24% of income in 2005-06, while public grants have fallen from 39% of university funding in 2005-06 to just 12% in 2022-23.
As direct government funding has been cut, tuition fees have become increasingly relied upon by university managements. But the real value of UK students’ fees has been massively eroded by inflation since being fixed at £9,250 in 2017. According to the vice-chancellors’ association, Universities UK (UUK), they have lost one-third of their value since 2017.
The collapse in home fees income has pushed universities to rely increasingly on international student recruitment, in effect using these students’ much higher tuition fees – which are not capped by the government – to subsidise the cost of teaching UK students. In 2022-23, international students accounted for 26% of all university places but contributed to 41% of tuition fees. That academic year saw a record for international student numbers, with 758,855 students coming from overseas to study at UK universities – the tenth consecutive year-on-year increase.
But the upwards trend stopped there: international student numbers fell by 5% in 2023-24. This academic year, international student visa applications are down by 16%. Some commentators have attributed this fall to the Tories’ visa restrictions, brought in before last year’s general election, which prevent international students from bringing family members with them to the UK. While this will have had some effect, another factor in falling international recruitment has been the economic and political crisis affecting a number of key overseas markets. Applications from Nigeria – the third biggest international recruitment market after India and China – have more than halved since 2022-23, largely as a result of the massive devaluation of the Nigerian currency, the Naira. The two countries with the next biggest percentage decrease in UK university applications are Bangladesh and Sri Lanka, both of which have seen mass movements against falling living standards and political corruption in recent years.
Crunch time
Now the crunch has hit. According to a report published in November by the Office for Students (OfS) – the university regulator – two-thirds of universities (66%) are projected to run deficit budgets this year. This gives an even bleaker picture than a previous OfS report produced last May, in which 40% of universities were predicting deficits.
As direct government funding to universities has been slashed, competition between universities for tuition fee income has intensified. In order to get an edge on their competitors university managements have taken out large private loans to fuel investment – for swanky new buildings and campuses, brand new courses, lucrative overseas recruitment schemes, and more. As a result, the sector’s total external debt increased from £5.57 billion in 2010-11 to £15.17 billion in 2020-21. Compounding the financial challenges facing vice-chancellors, many of these private loans are linked to debt covenants that require universities to maintain a certain level of surplus. If universities breach these covenants, they risk steep fines or early repayment, which would only accelerate their financial woes.
Of course, the real losers have not been university executives, or the vice-chancellors – who rake in an average salary of £325,000 – but students and staff. For years, university bosses have chosen to ‘balance the books’ by making cuts to jobs and campus services. This comes on top of a 25% fall in university workers’ wages since 2009, according to the University and Colleges Union (UCU). The vice-chancellors’ response this year has been the same as ever, as currently over half of universities are making cuts in response to the funding crisis.
Even more disastrous for students and staff would be a university going bust. According to an OfS review published in July, the funding crisis poses “a potentially existential threat to some providers”. A university bankruptcy would mean thousands of job losses. Thousands of students would be without a course – and they would likely come last in the pecking order, well behind the likes of banks and hedge funds, if it came to recouping the money they had shelled out for their degree.
The Labour government does not want to preside over such a further spiralling of chaos within higher education. That is why they have announced plans to increase tuition fees, as well as plans for a long-term overhaul of funding.
At the same time, Labour ministers have called on universities to continue making some cuts this year. Education secretary Bridget Phillipson has stressed that “universities are autonomous and there are expectations around how they manage their budgets”. Skills minister Jacqui Smith was more explicit when she called on universities “to be as efficient as possible”. This is one way for Labour to dampen expectations on how much support it will give universities. Allowing some university courses to go could also free up a larger proportion of school-leavers to enter apprenticeships and other training schemes aimed at addressing Britain’s so-called ‘skills shortage’. And a resultant fall in students attending university could help reign in the public debt mountain accrued from unpaid student loans, which currently stands at around £250 billion – around 10% of British GDP.
However, there are limits to how far Labour, governing as a ‘safe pair of hands’ for British capitalism, will want to see higher education shrinking. The sector is estimated to be one of the UK’s most valuable exporters. According to a recent UUK report, higher education generates over £250 billion for the economy each year. Making the case for state investment in universities, UUK leaders have claimed that the government makes £14 for every one pound spent on higher education. From Labour’s point of view, that is not an unpersuasive argument.
Labour funding plans are an attack
Labour’s immediate plans would see over a million students at English universities paying £285 more for courses in the academic year 2025-26, a 3.1% increase in line with the Office for Budget Responsibility’s (OBR) latest forecast of RPIX inflation. The fee cap would then continue to rise each subsequent academic year with this measure of inflation. Based on current forecasts, that would mean the yearly tuition fee rising to around £10,500 by 2029-30, a 13.5% increase over five years.
Unlike some past increases to tuition fees, which only affected new cohorts of students, Labour’s proposed fee rise would apply to all new and returning students – although some universities are reportedly unable to charge higher fees for existing students, due to the contracts they signed when they enrolled.
On the one hand, Labour’s current plans are not on the scale of the last major reforms to university funding, introduced by the Con-Dem coalition government in 2010. Then the tuition fee cap was trebled – from £3,000 to £9,000 – and there were large student protests around the country, including a demonstration of 50,000 in London in November that year.
But Labour’s current fee plans – never mind possible future proposals – are, all the same, a clear attack on students and young people, and working-class young people in particular.
A fee increase of £285 next year would do nothing to close the black hole in university funding. The increased cost of employers’ National Insurance contributions, which all universities are required to pay, would on its own eat up any funding ‘boost’ from higher fees next year. Meanwhile, the only measure Labour has announced for universities this year is an extra £40 million aimed at boosting the ‘commercialisation’ of research. That means that cuts and closures will remain on vice-chancellors’ agendas.
And while university bosses won’t feel the impact of a fee increase next year, the same cannot be said for students and working-class young people who are considering applying to university.
The average debt owed by a university graduate already stands at roughly £45,000. A further fee rise would only increase that debt burden. Under the loan repayment system brought in by the Tories from 2023-24, a majority of students (65%) are now expected to repay their loan debts in full over their lifetime. This is due to the loan repayment window – the length of time before student loans get written off – being extended from thirty to forty years, as well as the earnings threshold at which graduates repay their loans lowering from £27,000 to £25,000 per year. This represents a huge change from the old repayment system, when about one in five were expected to pay off their student loans in full.
It is therefore not the case, as some pundits claim, that a fee increase next year would have no effect on how much the average student pays for their degree. In fact, a majority of students taking out loans for full-time degree courses next year should expect to pay more over their lifetimes as a result of increased fees.
It is also not true that only better-earning graduates feel the impact of student debt. There is a pervasive idea that student loans have a basically inconsequential impact on graduates’ living standards, on the grounds that ‘you only have to pay it back once you’re earning enough’. But in reality, the loan repayment threshold of £25,000 is far from ‘enough’ for most graduates, who leave university to enter a world of stagnating wages, and the soaring cost of housing and other living costs. To put things in perspective, any worker working 40 hours per week on the new minimum wage of £12-21 from April 2025 will earn more than £25,000 per year. In other words, even the woefully inadequate minimum wage will be enough to see graduates giving up 9% of their payslip to the state each month as a result of student debt.
At the same time as announcing a fee rise, Bridget Phillipson confirmed that maintenance loans next year will also go up with inflation, by 3.1%. But that just means keeping the chasm between students’ living costs and their maintenance support as wide as it already is. As the Institute for Fiscal Studies (IFS) was forced to admit: “This does nothing to reverse the substantial real-terms cuts to the generosity of the maintenance system since 2020-21, leaving the poorest students able to borrow around 10% less in real terms than in 2020-21”. In order to cover the cost of being a student, a majority of full-time undergraduates (56%) are forced to find part-time jobs on top of their studies, working an average of 14.5 hours work, according to a survey by the Higher Education Policy Institute (HEPI).
So, what do Labour’s current plans for fees really amount to? In the immediate term, they are a promise to students of even more cuts, cost-of-living crisis, and debt – a deepening of the disaster that is already facing many young people on campus. This is the logical conclusion of a higher education system based predominantly on individual students taking out vast loans for a degree, which universities then compete for as part of an education market. By raising fees in September, Labour is only re-entrenching this marketised system.
Where for the fightback now?
One potential rallying force for a struggle to defend higher education could be the UCU. The union, which represents over 120,000 workers in further and higher education, released a statement in September calling on Starmer to raise corporation tax by 4.3% in order to fund universities. This ‘education levy’ would, the union argues, raise £17 billion per year, enough to scrap tuition fees while also leaving money for “much needed extra funding”. While that still would not be enough to fully fund universities and meet student maintenance costs, it is a clear step in the right direction.
However, the UCU general secretary Jo Grady’s statement responding to Labour’s tuition fee announcement did not mention the education levy idea. While Grady rightly criticised Labour’s fee hike plans and called instead for government ‘investment’, she did not specify what type of investment was necessary, nor how she would lead a struggle of her members – and students – to win it. A battle in the union for a fighting lead will be needed.
But while the UCU leadership has at least been forced into fighting words around university funding, the supposed national student leadership – the National Union of Students (NUS) – has been much less forthcoming. In response to Labour’s fee rise announcement, NUS has limited itself to calls for “balancing public and private investment in higher education”. This is despite the most recent NUS conference policy on funding, passed in 2021, which calls for the government to “have a plan to scrap tuition fees, and fully fund higher education”.
Meanwhile, there has been no call made by any major political party or individual MP for a new national movement to defeat fees and fully fund education. For a brief period when Jeremy Corbyn was leader of the Labour Party, free university education seemed possible in the minds of millions of young people. But since the defeat of Corbynism, sights have been lowered. However, that can be changed in the course of a struggle being built among students. While still raising the necessity of fully publicly funded education, it is also important that socialists put forward demands aimed at getting the mass of students fighting back now.
As part of the #FeesMustFall movement against tuition fee rises in South Africa in 2015, the initial demand of students was for the reversal of fee hikes. But in the course of that movement being built nationally, fuelled by the victories won on a number of campuses, the movement progressed to demanding free education across all South African universities. Under pressure from that mass movement of youth and workers, the ANC government was ultimately forced to impose a one-year fee freeze at universities across the country. A student movement in Britain against this year’s £285 fee increase could likewise be a significant step towards building a struggle aimed at free, fully funded education.
Campaigning on campus
Students could start by building local campaigns, which link up nationally, demanding that their university refuse to raise fees for the academic year 2025-2026, while pointing to the need for full funding from government instead. While the fee cap is set to rise from September 2025, it is up to the discretion of individual universities to adjust their own fee levels. Amidst a financial crisis throughout the sector, it is all but certain that universities, if left to their own devices, will choose to increase fees next year. Even the UK’s wealthiest university, Oxford, has updated its website confirming that “current university policy is to charge fees at the level of the cap set by the government, which for 2025 will be £9,535”. And after all, indexing fees with inflation is one of the policies that vice-chancellors have themselves pushed for as a short-term remedy to the funding crisis.
However, on no campus would raising fees by £285 next year fundamentally solve the crisis. One vice-chancellor has said that it would raise between £1.5 million and £4 million for his university. Nationally it is estimated that the September 2025 fee rise would bring in just under £400 million for higher education. That will not even touch the sides of the £3.4 billion sector-wide deficit that the OfS is now predicting for next academic year.
Students and workers have to fight for the funding that education really needs. That could begin with the demand that the extra £400 million which universities are set to make next year is fully funded by the government, not students. Campaigns could write to vice-chancellors, calling on them to join students and staff on their campus in demanding the government stop next year’s fee hike, and instead immediately grant the £400 million to the sector as direct government funding.
Those campaigns could also call on vice-chancellors to publicly pledge to freeze fees at their own university in the meantime – in effect, as an act of protest against the inadequacy of Labour’s plans to fix the university funding crisis. Undoubtedly the likes of Oxford and many other ‘research-intensive’ universities would be able to cover a fee freeze next year through their existing funding anyway. But if a vice-chancellor said they can’t afford to make that pledge, then students and staff should reply: ‘open the books and show us where the money is being spent’. Any university that genuinely couldn’t afford a fee freeze would only have more reason to join students and staff on their campus, within a ‘united front’ of other universities nationally, in fighting for the full funding universities need from the Labour government.
To build this movement and put maximum pressure on the vice-chancellors and the government, students should call on their local students’ union to join the campaign. Where it is possible, student campaigners should try to do so by-passing motions through student union structures, as this can highlight to other students the potential role that student unions could play as democratic, fighting organisations. But if necessary – for example, if the next student union meeting is too far in the future, or its rules undemocratically prevent ‘political’ motions being discussed – then students should lobby their student union officers directly, appealing for them to join the campaign.
Political alternative
As a step towards building a movement for fully funded, free education, Socialist Students – the national campaigning organisation that student members of the Socialist Party help to build – has initiated the ‘Funding Not Fees’ campaign. This was set up to draw together students, young workers, university staff, trade unionists and community campaigners in the fight for fully funded, free education, paid for by taking the wealth off the super-rich. Where Socialist Party members are active on campuses, we will be helping to organise campaigns under this banner, while raising what we think is needed to win the campaign’s demands.
A crucial component in the fight for fully funded, free education will be the building of a serious political opposition to Starmer, and any other capitalist government that seeks to make students and workers foot the bill for the crisis of capitalism. That ultimately means building a mass party, based on the independent organisation of the working class, with a socialist programme to fight for the necessary wealth, resources and control off big business and the super-rich.
Students can play a role in accelerating events leading to the development of such a political force. Funding Not Fees campaigners have begun organising lobbies of local MPs, putting pressure on them to join the fight against Labour’s fee hike and for university funding. These lobbies should include trade unionists and community activists on the frontline of fighting against this Labour government – for example, Unite campaigners fighting to restore the winter fuel payment, or NEU sixth form college staff striking for higher pay. That would help to hammer home the generalised character of the battle students are facing: this is not just a fight for education, but a fight to end all the attacks coming from a Starmer government acting on behalf of an ailing capitalist system.
Labour was comfortably the biggest party among young people at the recent general election. Many who voted will have done so because of their experience of the Tories, who have overseen a decimation of young people’s futures. Even while there was little enthusiasm among most young people for Starmer’s Labour, not least over its support for the war on Gaza, there will have been an expectation that things would get at least somewhat better.
But the reality set to hit millions of students is that Labour is making things worse: raising fees; allowing more cuts to education; keeping maintenance loans at a record low; putting bus fares up by 50%; cutting what’s left of youth clubs; and much more. That reality will continue to fuel the particular openness among young people for an alternative to Labour, the Tories and all the pro-capitalist parties. However, a conscious intervention by socialists is needed to transform that open mood into a fightback that starts now.
Labour is promising to announce further and even more serious attacks on university funding later this year. Students need a level of cohesion and battle-readiness that is up to fighting these attacks as they come. By announcing the fee increase, Labour is testing the waters for how far they can go. Students and workers must not allow this latest fee hike to be the ‘thin end of the wedge’ that pushes through even bigger attacks on universities.